In SEC v. Jarkesy, No. 22-859, 603 U.S. __ (2024), the Supreme Court held that the Seventh Amendment prohibits the Securities and Exchange Commission (SEC or Commission) from seeking civil penalties in certain enforcement actions when the Commission chooses to proceed in-house before its own administrative law judges (ALJs), rather than in federal court. In
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THE LATEST ON GOVERNMENT INQUIRIES AND ENFORCEMENT ACTIONS
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OFAC Enforcement Action Targets Non-U.S. Business Purchasing Services From North Korean Firm
On June 26, Treasury’s Office of Foreign Assets Control (OFAC) announced the settlement of an enforcement action against an Italian animation company that violated OFAC’s sanctions on North Korea. The enforcement action highlights several key propositions regarding sanctions compliance: (1) non-U.S. businesses cannot ignore U.S. sanctions if they are transacting through the U.S. or using…
Disruptive Technology Strike Force Announces Its First Declination to Prosecute Under the National Security Division’s Voluntary Self-Disclosure Program
On May 22, 2024, the Department of Justice’s National Security Division (“NSD”) announced its first declination of prosecution for a company under the voluntary self-disclosure program established by the National Security Division Enforcement Policy for Business Organizations (“NSD Enforcement Policy”). An individual who worked for a United States-based biochemical company, along with his co-conspirator, each…
CFPB: For-Profit School Misrepresented ISAs, Made False Claims About Grads’ Employment Rates
On April 17, 2024, the Consumer Financial Protection Bureau entered an order against a for-profit vocational school and its CEO for mischaracterizing the school’s income-share agreements (ISAs) and misrepresenting its graduates’ employment rates. The CFPB said the school drove students to finance their training programs with promises of high graduate employability. To finance students’ education,…
SEC Speaks 2024: In Defense of Enforcement’s Aggressive Agenda
On April 2 and 3, 2024, U.S. Securities and Exchange Commission Chair Gary Gensler, Division of Enforcement Director Gurbir Grewal and other senior SEC officials convened at the SEC Speaks conference held in Washington, DC to discuss the SEC’s accomplishments in fiscal year 2023 and announce its priorities for 2024. …
Spring Has Sprung for Recent Reg NMS Reporting Changes
On March 6, the SEC released its long-anticipated adopting release amending Rule 605.[1] Separately, in late February, FINRA issued Regulatory Notice 24-05 discussing new FINRA Rule 6151, which requires member firms to provide Rule 606 reports to FINRA. The following provides a brief overview of these recent moves by both regulators. …
Federal District Court Declares Corporate Transparency Act (CTA) Unconstitutional
On March 1, 2024, the United States District Court for the Northern District of Alabama declared the Corporate Transparency Act (“CTA”) unconstitutional. Enacted as part of the Anti-Money Laundering Act of 2020, the CTA requires certain legal entities to report beneficial ownership information (“BOI”) to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”). …
G7+ Coalition Issues Alert on Russian Oil Price Cap Evasion Methods and How to Report Violations
On February 1, 2024, the G7+ Coalition (consisting of the G7, the European Union, and Australia) published an Oil Price Cap (OPC) Compliance and Enforcement Alert (the “Alert”), identifying notable OPC evasion methods and recommending various methods to reduce the risk of evasion and its negative impacts. The OPC was enacted in December 2022 in…
FinCEN Issues Access Rule Compliance Guide for Beneficial Ownership Information
Rule Regarding Access to Beneficial Ownership Information Takes Effect
On February 21, 2024, FinCEN published a Small Entity Compliance Guide to aid in compliance with the Corporate Transparency Act’s (“CTA”) Beneficial Ownership Information (“BOI”) Access and Safeguards Rule (“Access Rule”). The Compliance Guide is called the Small Entity Compliance Guide only because federal law requires…
Bank Secrecy Act’s Anti-Money Laundering and Counter Terrorism Financing Requirements to Apply to Investment Advisers
The Bank Secrecy Act (“BSA”) establishes program, recordkeeping, and reporting requirements for certain financial institutions to combat and detect money laundering, terrorist financing, and other illicit activities. On February 13, 2024, FinCEN proposed new rules which expand the scope of the BSA to include certain investment advisers, which currently are not subject to any federal…